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Running a surplus isn't even a positive goal for governments. In US history, periods of federal government surplus were always followed quite rapidly by recessi
by nhaehnle 12y ago
Running a surplus isn't even a positive goal for governments. In US history, periods of federal government surplus were always followed quite rapidly by recessions or even depressions.
There are even good, clean, mathematical accounting truths behind this. If you sum up all monetary assets and all debts, the net must be zero just as a matter of accounting. So, if individuals are to build up savings (which most people would probably agree is a good thing), somebody else must go into debt. This somebody else could be private firms doing investment, or it could be government.
If you want government to be in surplus or at least netting zero as well, then firms must necessarily be in ever growing debt, which is probably just as unsustainable.
(Note that, as long as you look at a single isolated country, a third option is that foreign countries become indebted. But since we live in a closed system and the net over all countries is zero, this is not really a workable option either.)